Digital music services like Pandora would pay more under proposed “Oldies” law

Pandora and Sirius XM already pay far more in copyright royalties than AM/FM stations, but that’s not stopping the music industry from demanding that Congress force the digital radio services to pay even more.

This week, SoundExchange, a royalty collection service, announced a heart-tugging campaign called “Project 72.” The campaign is to back the “RESPECT Act,” a law proposed by George Holding (R-NC) and John Conyers (D-MI) that would require digital radio services to pay performance royalties for pre-1972 recordings.

As it stands, Sirius and Pandora don’t pay to perform these early recordings since they are not covered by federal copyright law.

The industry claims the issue is one of fairness, arguing that the earlier recordings deserve the same protection as the later ones. And, of course, SoundExchange is churning out quotes by famous acts like The Beach Boys and Cyndi Lauper that urge Congress to “do right by legacy artists” such as Aretha Franklin.

Sounds fair, right? After all, what sort of philistine wouldn’t pay those dear old musicians for their oldies? Alas, it’s not that simple.

As I’ve explained before, the vagaries of copyright law mean that Pandora doesn’t pay for pre-1972 recordings — but neither does any other radio service. What’s more, the digital services are paying large sums to play post-’72 performance rights, while AM/FM stations (which are much richer) pay nothing at all. And, in any case, everyone must pay the songwriters and publishers for the pre-1972 works.

All the RESPECT Act would do is exacerbate these irrational distinctions between traditional and digital radio services (and possibly put Pandora and Sirius XM out of business altogether), while failing to solve the music industry’s deeper problem, which is the permanent decline of CD sales.

There is also the question of whether the pre-1972 works should be subject to copyright protection in the first place. Congress has already bestowed plenty of favors on the entertainment industry, which has resulted in the public domain — upon which many of the oldie songwriters relied so heavily — drying up. Expanding copyright protection even further would simply reinforce this pattern of cultural stifling.

Fortunately, the RESPECT Act appears to be more of a marketing stunt than a serious bill. As this month’s debacle over patent reform revealed, the current Congress is incapable of passing even bipartisan legislation, which means this particular sop to the music industry is likely to die by the midterm elections.